APPENDIX VI SUMMARY OF PRINCIPAL LEGAL AND HKExnews by alicejenny

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									APPENDIX VI                                                         SUMMARY OF PRINCIPAL LEGAL
                                                                     AND REGULATORY PROVISIONS

PRC JUDICIAL SYSTEM

       Under the PRC Constitutional Law (                              ) and the Law of Organization of the People’s
Courts (                                        ), the judicial system in PRC is made up of the Supreme People’s
Court, the local people’s courts, military courts and other special people’s courts. The local people’s courts are
comprised of the basic people’s courts, the intermediate people’s courts and the higher people’s courts. The basic
people’s courts are organized into civil, criminal, and administrative divisions. The intermediate people’s courts are
organized into divisions similar to those of the basic people’s courts, and are further organized into other special
divisions, such as the intellectual property division. The higher level people’s courts supervise the basic and
intermediate people’s courts. The people’s procuratorates also have the right to exercise legal supervision over the
civil proceedings of people’s courts of the same level and lower levels. The Supreme People’s Court is the highest
judicial body in the PRC. It supervises the administration of justice by all of the people’s courts.

      The people’s courts employ a “second instance as final” appellate system. A party may appeal against a
judgment or order of the people’s court of first instance to the people’s court at the next higher level. Second
judgments or orders given at the next higher level are final. First judgments or orders of the Supreme People’s Court
are also final. If, however, the Supreme People’s Court or a people’s court at a higher level finds an error in a
judgment or order which has been given in any people’s court at a lower level, or the president of the people’s court
finds an error in a judgment or order, the case may then be retried according to the judicial supervision procedures.

      The Civil Procedure Law of the PRC (                                       ) (the “PRC Civil Procedure Law”),
which was adopted on April 9, 1991 and amended on October 28, 2007, sets forth the criteria for instituting a civil
action, the jurisdiction of the people’s courts, the procedures to be followed for conducting a civil action and the
procedures for enforcement of a civil judgment or order. All parties to a civil action conducted within the PRC must
comply with the PRC Civil Procedure Law. Generally, a civil case is initially heard by a local court of the
municipality or province in which the defendant resides. The parties to a contract may, by an express agreement,
select a jurisdiction where civil actions may be brought, provided that the jurisdiction is either the plaintiff’s or the
defendant’s place of residence, the place of execution or implementation of the contract or the object of the action.
However, such selection cannot violate the stipulations of grade jurisdiction and exclusive jurisdiction in any case.

      A foreign individual or enterprise generally has the same litigation rights and obligations as a citizen or legal
person of the PRC. If a foreign country’s judicial system limits the litigation rights of PRC citizens and enterprises,
the PRC courts may apply the same limitations to the citizens and enterprises of that foreign country within the
PRC. If any party to a civil action refuses to comply with a judgment or order made by a people’s court or an award
granted by an arbitration panel in the PRC, the aggrieved party may apply to the people’s court to request for
enforcement of the judgment, order or award. There are time limits imposed on the right to apply for such
enforcement and the time limit is two year. If a person fails to satisfy a judgment made by the court within the
stipulated time, the court will, upon application by either party, mandatorily enforce the judgment.

      A party seeking to enforce a judgment or order of a people’s court against a party who is not located within the
PRC and does not own any property in the PRC, may apply to a foreign court with proper jurisdiction for recognition
and enforcement of the judgment or order. A foreign judgment or ruling may also be recognized and enforced by the
people’s court according to the PRC enforcement procedures if the PRC has entered into, or acceded to, an
international treaty with the relevant foreign country, which provides for such recognition and enforcement, or if the
judgment or ruling satisfies the court’s examination according to the principle of reciprocity, unless the people’s
court finds that the recognition or enforcement of such judgment or ruling will result in a violation of the basic legal
principles of the PRC, its sovereignty or security, or for reasons of social and public interests.

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APPENDIX VI                                                       SUMMARY OF PRINCIPAL LEGAL
                                                                   AND REGULATORY PROVISIONS


THE PRC COMPANY LAW, SPECIAL REGULATIONS AND MANDATORY PROVISIONS

     On December 29, 1993, the Standing Committee of the Eighth NPC adopted the PRC Company Law which
came into effect on July 1, 1994 and was amended for the first time on December 25, 1999, the second time on
August 28, 2004 and the third time on October 27, 2005. The newly amended PRC Company Law has been
promulgated and became effective from January 1, 2006.

       On July 4, 1994, the Special Regulations were passed at the Twenty-Second Standing Committee Meeting of
the State Council, and they were promulgated and implemented on August 4, 1994. The Special Regulations are
formulated according to the provisions of Sections 85 and 155 of the PRC Company Law (1993) in respect of the
overseas share subscription and listing of joint stock limited companies. The Mandatory Provisions were issued
jointly by the Securities Commission and the State Economic Restructuring Commission on August 27, 1994,
prescribing provisions which must be incorporated into the articles of association of joint stock limited companies
to be listed overseas. Accordingly, the Mandatory Provisions have been incorporated in the Articles of Association
(which are summarized in the appendix entitled “Appendix VII — Summary of the Articles of Association” to this
prospectus). References to a “company” are to a joint stock limited liability company established under the PRC
Company Law with overseas listed foreign invested shares.

      Copies of the Chinese text of the PRC Company Law, Special Regulations and the Mandatory Provisions
together with copies of their unofficial English translations thereof are available for inspection as mentioned in the
appendix entitled “Appendix IX — Documents Delivered to the Registrar of Companies and Available for
Inspection” to this prospectus.

General

       A “joint stock limited liability company” (hereinafter referred to as “company”) is a corporate legal person
incorporated under the PRC Company Law, whose registered capital is divided into shares of equal par value. The
liability of its shareholders is limited to the extent of the shares held by them, and the liability of the company is
limited to the full amount of all the assets owned by it.

      A state-owned enterprise that is restructured into a company must comply with the conditions and
requirements specified by law and administrative regulation, for the modification of its operation mechanisms,
the systematic handling and evaluation of the company’s assets and liabilities and the establishment of internal
management organs.

       A company must conduct its business in accordance with law and professional ethics.

Incorporation

       A company may be incorporated by promotion or subscription.

       A company may be incorporated by two to 200 promoters, but at least half of the promoters must reside in the
PRC.

       Companies incorporated by promotion are companies with the registered capital entirely subscribed for by
the promoters. Where companies are incorporated by subscription, the promoters are required to subscribe for not
less than 35% of the total number of shares of a company, and the remaining shares can be offered to the public or
specific persons, unless otherwise required by law.

    The PRC Company Law has provided that the minimum registered capital of a joint stock limited liability
company is RMB5 million. For companies incorporated by promotion, the registered capital has to be the total

                                                      – VI-2 –
APPENDIX VI                                                      SUMMARY OF PRINCIPAL LEGAL
                                                                  AND REGULATORY PROVISIONS


capital subscribed for by all promoters as registered with the relevant Administration for Industry and Commerce;
for companies established by public subscription, the registered capital is the amount of total paid-up capital as
registered with the relevant administration bureau for industry and commerce.

       Pursuant to the Securities Law, the total capital of a company which proposes to apply for its shares to be
listed on a stock exchange must not be less than RMB30 million.

      The promoters shall convene an inaugural meeting within 30 days after the issued shares have been fully paid
up, and shall give notice to all subscribers or make a public announcement of the date of the inaugural meeting
15 days before the meeting. The inaugural meeting may be convened only with the presence of shareholders holding
shares representing more than 50% of the total issued shares of the company. At the inaugural meeting, matters
including the adoption of draft articles of association proposed by the promoter(s) and the election of the board of
directors and the supervisory committee of the company will be dealt with. All resolutions of the meeting require
the approval of subscribers with more than half of the voting rights present at the meeting.

       Within 30 days after the conclusion of the inaugural meeting, the board of directors shall apply to the
registration authority for registration of the establishment of the company.

     A company is formally established and has the status of a legal person after the approval for registration has
been given by the relevant Administration for Industry and Commerce and a business license has been issued.

       A company’s promoters shall individually and collectively be liable for: (i) the payment of all expenses and
liabilities incurred in the incorporation process if the company cannot be incorporated; (ii) the repayment of
subscription monies to the subscribers together with interest at bank rates for a deposit of the same term if the
company cannot be incorporated; and (iii) damages suffered by the company as a result of the default of the
promoters in the course of incorporation of the company.

Share Capital

      The promoters of a company can make capital contributions in cash or in kind, that can be valued in currency
and transferable according to law such as intellectual property rights or land use rights based on their appraised
value provided that the amount of capital contribution in cash by all shareholders must not be less than 30% of a
company’s registered capital.

      If capital contribution is made other than in cash, valuation and verification of the property contributed must
be carried out and converted into shares.

      A company may issue registered or bearer share. However, shares issued to promoter(s) or legal person(s)
shall be in the form of registered share and shall be registered under the name(s) of such promoter(s) or legal
person(s) and shall not be registered under a different name or the name of a representative.

       The Special Regulations and the Mandatory Provisions provide that shares issued to foreign investors and
listed overseas shall be issued in registered form and shall be denominated in Renminbi and subscribed for in
foreign currency.

      Under the Special Regulations and the Mandatory Provisions, shares issued to foreign investors and investors
from the territories of Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan and listed
overseas are known as overseas listed foreign invested shares, and those shares issued to investors within the PRC
other than the territories specified above are known as domestic shares.

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APPENDIX VI                                                       SUMMARY OF PRINCIPAL LEGAL
                                                                   AND REGULATORY PROVISIONS


       A company may offer its shares to the public overseas with approval by the securities administration
department of the State Council. Specific measures shall be specifically formulated by the State Council. Under the
Special Regulations, upon approval of CSRC, a company may agree, in the underwriting agreement in respect of an
issue of overseas listed foreign invested shares, to retain not more than 15% of the aggregate number of overseas
listed foreign invested shares proposed to be issued after accounting for the number of underwritten shares.

      The share offering price may be equal to or greater than par value, but shall not be less than par value.

     The transfer of shares by shareholders should be conducted via the legally established stock exchange or in
accordance with other methods as stipulated by the State Council. Transfer of registered shares by a shareholder
must be made by means of an endorsement or by other means stipulated by laws or by administrative regulations.
Bearer shares are transferred by delivery of the share certificates to the transferee.

      Shares held by a promoter of a company shall not be transferred within one year after the date of the
company’s incorporation. Shares issued by a company prior to the public offer of its shares shall not be transferred
within one year from the date of listing of the shares of the company on a stock exchange. Directors, supervisors and
senior management of a company shall not transfer over 25% of the total shares held by each of them in the company
each year during their term of office and shall not transfer any share of the company held by each of them within one
year after the listing date. There is no restriction under the PRC Company Law as to the percentage of shareholding
a single shareholder may hold in a company.

      Transfers of shares may not be entered in the register of shareholders within 20 days before the date of a
shareholders’ meeting or within five days before the record date set for the purpose of distribution of dividends.

Increase in Capital

     Under the PRC Company Law, an increase in the capital of a company by means of an issue of new shares
must be approved by shareholders in general meeting.

      Save for the abovementioned shareholder approval requirement, for a public offering of new shares, the
Securities Law provides that the company shall: (i) have a sound organizational structure with satisfactory operating
record; (ii) have the capability of continuing profitability and a healthy financial position; (iii) have no false
statements and other material breaches in the financial and accounting documents of the last three years; (iv) fulfill
other conditions required by the securities administration department of the State Council as approved by the State
Council.

      Public offer requires the approval of the securities administration department of the State Council.

     After payment in full for the new shares issued, a company must change its registration with the relevant state
bureau for the administration for industry and commerce and issue a public notice accordingly.

Reduction of Share Capital

     Subject to the minimum registered capital requirements, a company may reduce its registered capital in
accordance with the following procedures prescribed by the PRC Company Law:

      (i)    the company shall prepare a balance sheet and an inventory of the assets;

      (ii)   the reduction of registered capital must be approved by shareholders in general meeting;

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APPENDIX VI                                                         SUMMARY OF PRINCIPAL LEGAL
                                                                     AND REGULATORY PROVISIONS


      (iii)   the company shall inform its creditors of the reduction in capital within ten days and publish an
              announcement of the reduction in the newspaper within 30 days after the resolution approving the
              reduction has been passed;

      (iv)    the creditors of the company may within the statutory prescribed time limit require the company to pay
              its debts or provide guarantees covering the debts; and

      (v)     the company must apply to the relevant administration bureau for industry and commerce for
              registration of the reduction in registered capital.

Repurchase of Shares

      A company may not purchase its own shares other than for the purpose of:

      (i)     reducing its capital by canceling its shares or merging with another company holding its shares;

      (ii)    granting shares as a reward to the staff of the company; or

      (iii)   purchasing the company’s own shares upon request of its shareholders who vote against the resolution
              regarding the merger or division of the company in a general meeting.

       The shares of the company to be repurchased by itself as a reward to its staff shall not exceed 5% of the total
number of its issued shares. Any funds for such purpose shall be paid out of after-tax profits of the company, and the
shares so purchased shall be transferred to the company’s staff within a year. The Mandatory Provisions provide that
upon obtaining approvals in accordance with the articles of association of the company and from the relevant
supervisory authorities, a company may repurchase its issued shares for the foregoing purposes by way of a general
offer to its shareholders or purchase on a stock exchange or an off-market contract.

Transfer of Shares

      Shares may be transferred in accordance with the relevant laws and regulations.

Shareholders

       Shareholders have such rights and obligations as set forth in the articles of association of the company. The
articles of association of a company are binding on each shareholder.

      Under the PRC Company Law and the Mandatory Provisions, the rights of a shareholder include:

      (i)     to attend in person or appoint a proxy to attend shareholders’ general meetings, and to vote in respect of
              the number of shares held;

      (ii)    to transfer his shares in accordance with applicable laws and regulations and the articles of association
              of the company;

      (iii)   to inspect the company’s articles of association, shareholders’ registers, records of debentures, minutes
              of shareholders’ general meetings, board resolutions, supervisors resolutions, financial and accounting
              reports and put forward proposals or raise questions about the business operations of the company;

      (iv)    if a resolution adopted by a shareholders’ general meeting or the board of directors violates any law or
              administrative regulations or infringes the lawful rights and interests of shareholders, to institute an
              action in the people’s court demanding that the illegal infringing action be stopped;

      (v)     to receive dividends in respect of the number of shares held;

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APPENDIX VI                                                        SUMMARY OF PRINCIPAL LEGAL
                                                                    AND REGULATORY PROVISIONS


      (vi)    to obtain surplus assets of the company upon its termination in proportion to his or her shareholding; to
              claim against other shareholders who abuse their shareholders’ rights for the damages; and

      (vii) any other shareholders’ rights specified in the company’s articles of association.

       The obligations of a shareholder include the obligation to abide by the company’s articles of association, to
pay the subscription monies in respect of the shares subscribed for, to be liable for the company’s debts and
liabilities to the extent of the amount of subscription monies agreed to be paid in respect of the shares taken up by
him/her, not to abuse shareholders’ right to damage the interests of the company or other shareholders of the
company; not to abuse the independent status of the company as a legal person and the limited liability to damage
the interests of the creditors of the company and any other shareholders’ obligation specified in the company’s
articles of association.

Shareholders’ General Meetings

     The shareholders’ general meeting is the organ of authority of the company, which exercises its powers in
accordance with the PRC Company Law.

      The shareholders’ general meeting exercises the following principal powers:

      (i)     to decide on the company’s operational policies and investment plans;

      (ii)    to elect or remove the directors and supervisors who are not representatives of the employees and
              decide on matters relating to the remuneration of directors and supervisors;

      (iii)   to consider and approve reports of the board of directors;

      (iv)    to consider and approve reports of the supervisory committee or the supervisors;

      (v)     to consider and approve the company’s proposed annual financial budget and financial accounts;

      (vi)    to consider and approve the company’s proposals for profit distribution and for recovery of losses;

      (vii) to decide on any increase or reduction in the company’s registered capital;

      (viii) to decide on the issue of bonds by the company;

      (ix)    to decide on issues such as merger, division, dissolution and liquidation of the company and other
              matters;

      (x)     to amend the articles of association of the company; and

      (xi)    other powers specified in the articles of association of the company.

     Shareholders’ general meeting is required to be held once every year. An extraordinary shareholders’ general
meeting is required to be held within two months after the occurrence of any of the following circumstances:

      (i)     the number of directors is less than the number provided for in the PRC Company Law or less than
              two-thirds of the number specified in the company’s articles of association;

      (ii)    the losses of the company which are not made up reach one-third of the company’s total paid up share
              capital;

      (iii)   a request by a shareholder that holds, or by shareholders that hold in aggregate, 10% or more of the
              company’s shares;

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APPENDIX VI                                                        SUMMARY OF PRINCIPAL LEGAL
                                                                    AND REGULATORY PROVISIONS


      (iv)   when deemed necessary by the board of directors;

      (v)    when the supervisory committee proposes convening it; or

      (vi)   other matters required by the company’s articles of association.

      Shareholders’ general meetings shall be convened by the board of directors, and presided over by the
chairman of the board of directors.

      Notice of the Shareholders’ general meeting shall be given to all shareholders 20 days before the meeting
under the PRC Company Law and 45 days under the Special Regulations and the Mandatory Provisions, stating the
matters to be considered at the meeting. Under the Special Regulations and the Mandatory Provisions, shareholders
wishing to attend are required to give to the company written confirmation of their attendance 20 days prior to the
meeting. Under the Special Regulations, at an annual general meeting of a company, shareholders holding 5% or
more of the voting rights in the company are entitled to propose to the company in writing new resolutions to be
considered at that meeting, which if within the powers of a shareholders’ general meeting, are required to be added
to the agenda of that meeting.

    Shareholders present at a shareholders’ general meeting have one vote for each share they hold, but the
company shall have no vote for any of its own shares the company holds.

      Resolutions proposed at the shareholders’ general meeting shall be adopted by more than half of the votes
voting rights by shareholders present in person (including those represented by proxies) at the meeting, with the
exception of matters relating to merger, division, dissolution, increase or reduction in registered capital, change in
the form of the company or amendments to the articles of association which shall be adopted by shareholders with
two-thirds or more of the voting rights cast by shareholders present (including those represented by proxies) at the
meeting.

      Shareholders may entrust a proxy to attend shareholders’ general meetings on his or her behalf by a power of
attorney which sets out the scope of exercising the voting rights.

      There is no specific provision in the PRC Company Law regarding the number of shareholders constituting a
quorum in a shareholders’ meeting. However, the Special Regulations and the Mandatory Provisions provide that a
company’s annual general meeting may be convened when replies to the notice of that meeting from shareholders
holding shares representing 50% or more of the voting rights in the company have been received 20 days before the
proposed date, or if that 50% level is not achieved, the company shall within five days of the last day for receipt of
the replies notify shareholders by public announcement of the matters to be considered at the meeting and the date
and place of the meeting and the annual general meeting may be held thereafter. The Mandatory Provisions require
class meetings to be held in the event of a variation or derogation of the class rights of a class. Holders of domestic
invested shares and holders of overseas listed foreign invested shares are deemed to be different classes of
shareholders for this purpose.

Directors

      A company shall have a board of directors, which shall consist of five to 19 members and there can be staff
representatives of our Company. Under the PRC Company Law, each term of office of a director shall not exceed
three years. A director may serve consecutive terms if re-elected.

                                                      – VI-7 –
APPENDIX VI                                                        SUMMARY OF PRINCIPAL LEGAL
                                                                    AND REGULATORY PROVISIONS


       Meetings of the board of directors shall be convened at least twice a year. Notice of meeting shall be given to
all directors and supervisors at least ten days before the meeting. The board of directors may provide for a different
method of giving notice and notice period for convening an extraordinary meeting of the board of directors.

      Under the PRC Company Law, the board of directors exercises the following powers:

      (i)     to convene the shareholders’ general meeting and report on its work to the shareholders;

      (ii)    to implement the resolution of the shareholders’ general meeting;

      (iii)   to decide on the company’s business plans and investment plans;

      (iv)    to formulate the company’s proposed annual financial budget and final accounts;

      (v)     to formulate the company’s proposals for profit distribution and for recovery of losses;

      (vi)    to formulate proposals for the increase or reduction of the company’s registered capital and the issue of
              corporate bonds;

      (vii) to prepare plans for the merger, division or dissolution of the company;

      (viii) to decide on the company’s internal management structure;

      (ix)    to appoint or dismiss the company’s general manager, and based on the general manager’s
              recommendation, to appoint or dismiss deputy general managers and financial officers of the
              company and to decide on their remuneration;

      (x)     to formulate the company’s basic management system; and

      (xi)    any other power given under the articles of association of the company.

      In addition, the Mandatory Provisions provide that the board of directors is also responsible for formulating
the proposals for amendment of the articles of association of a company.

      Meetings of the board of directors shall be held only if more than half of the directors are present. Resolutions
of the board of directors require the approval of more than half of all directors.

      If a director is unable to attend a board meeting, he may appoint another director by a written power of
attorney specifying the scope of the authorization to attend the meeting on his behalf.

      If a resolution of the board of directors violates the laws, administrative regulations or the company’s articles
of association as a result of which the company sustains serious losses, the directors participating in the resolution
are liable to compensate the company. However, if it can be proven that a director expressly objected to the
resolution when the resolution was voted on, and that such objections were recorded in the minutes of the meeting,
such director may be relieved of that liability.

      Under the PRC Company Law, the following persons may not serve as a director of a company:

      (i)     persons without civil capacity or with restricted civil capacity;

      (ii)    persons who have committed the offence of corruption, bribery, taking of property, misappropriation of
              property or destruction of the social economic order, and have been sentenced to criminal punishment,
              where less than five years have elapsed since the date of completion of the sentence; or persons who
              have been deprived of their political rights due to criminal offense, where less than five years have
              elapsed since the date of the completion of implementation of this deprivation;

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APPENDIX VI                                                        SUMMARY OF PRINCIPAL LEGAL
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      (iii)   persons who are former directors, factory managers or managers of a company or enterprise which has
              become bankrupt and been liquidated due to mismanagement and who are personally liable for the
              bankruptcy of such company or enterprise, where less than three years have elapsed since the date of the
              completion of the bankruptcy and liquidation of the company or enterprise;

      (iv)    persons who were legal representatives of a company or enterprise which had its business license
              revoked due to violation of the law and who are personally liable, where less than three years have
              elapsed since the date of the revocation of the business license; or

      (v)     persons who have a relatively large amount of debt due and outstanding.

      (vi)    Other circumstances under which a person is disqualified from acting as a director of a company are set
              out in the Mandatory Provisions (which have been incorporated in the Articles of Association, a
              summary of which is set out in the appendix entitled “Appendix VII — Summary of the Articles of
              Association” to this prospectus).

      The board of directors shall appoint a chairman, who is elected with approval of more than half of all the
directors. The chairman of the board of directors exercises, among others, the following powers:

      (i)     to preside over shareholders’ general meetings and convene and preside over meetings of the board of
              directors; and

      (ii)    to check on the implementation of the resolutions of the board of directors.

      The legal representative of a company, in accordance with the company’s articles of association, may be the
chairman, any executive director or the manager.

      The Special Regulations provide that a company’s directors, supervisors, managers and other officers bear
fiduciary duties and the duty to act diligently. They are required to faithfully perform their duties, protect the
interests of the company and not to use their positions for their own benefit. The Mandatory Provisions (which have
been incorporated into the Articles of Association, a summary of which is set out in the appendix entitled
“Appendix VII— Summary of the Articles of Association” to this prospectus) contain further elaborations of such
duties.

Supervisors

      A company shall have a supervisory committee composed of not less than three members. Each term of office
of a supervisor is three years and he may serve consecutive terms if re-elected.

      The supervisory committee is made up of shareholders representatives and an appropriate proportion of the
company’s staff representatives; and the percentage of the number of the company’s staff representatives shall not
be less than one-third. Directors and senior management shall not act as supervisors.

      Requirements in relation to the power of the supervisory committee under the PRC Company Law are as
follows:

      (i)     to examine the company’s financial affairs;

      (ii)    to supervise the directors and senior management in their performance of their duties and to propose the
              removal of any director or senior management who violates the laws, regulations, articles of association
              or shareholders’ resolution;

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      (iii)   to require any director or senior management whose act is detrimental to the company’s interests to
              rectify such act;

      (iv)    to propose the convening of extraordinary shareholders’ general meetings and, in the event that the
              board of directors fails to perform the duties of convening and presiding shareholders’ meetings to
              convene and preside over shareholders’ meetings;

      (v)     to propose any bills to shareholders’ general meetings;

      (vi)    to commence any action against any directors or senior management; and

      (vii) other powers specified in the company’s articles of association.

      The circumstances under which a person is disqualified from being a director of a company described above
apply mutates mutandis to supervisors of a company.

      The Special Regulations provide that a company’s directors and supervisors shall have fiduciary duties. They
are required to faithfully perform their duties, protect the interest of the company and not to use their positions for
their own benefit.

Managers and Senior Officers

     A company shall have a manager who shall be appointed or removed by the board of directors. The manager is
accountable to the board of directors and may exercise the following powers:

      (i)     in charge of the production, operation and management of the company and arrange for the
              implementation of resolutions of the board of directors;

      (ii)    arrange for the implementation of the company’s annual business and investment plans;

      (iii)   formulate plans for the establishment of the company’s internal management structure;

      (iv)    formulate the basic administration system of the company;

      (v)     formulate the company’s internal rules;

      (vi)    recommend the appointment and dismissal of deputy managers and any financial officer and appoint or
              dismiss other administration officers (other than those required to be appointed or dismissed by the
              board of directors);

      (vii) attend board meetings as a non-voting attendant; and

      (viii) other powers conferred by the board of directors or the company’s articles of association.

       The Special Regulations and the Mandatory Provisions provide that the other senior management of a
company includes the financial officer, secretary of the board of directors and other executives as specified in the
articles of association of the company.

      The circumstances under which a person is disqualified from being a director of a company described above
apply mutatis mutandis to managers and officers of the company.

       The articles of association of a company shall have binding effect on the shareholders, directors, supervisors,
managers and other senior management of the company. Such persons shall be entitled to exercise their rights, apply
for arbitration and issue legal proceedings according to the articles of association of the company. The provisions of
the Mandatory Provisions regarding the senior management of a company have been incorporated in the Articles of

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APPENDIX VI                                                        SUMMARY OF PRINCIPAL LEGAL
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Association, a summary of which is set out in the appendix entitled “Appendix VII — Summary of the Articles of
Association” to this prospectus.

Duties of Directors, Supervisors, Managers and Senior Officers

      A director, supervisor, manager and other senior officer of a company are required under the PRC Company
Law to comply with the relevant laws, regulations and the company’s articles of association, carry out their duties
honestly and protect the interests of the company. A director, supervisor, manager and other senior officer of a
company is also under a duty of confidentiality to the company and is prohibited from divulging secret information
of the company save as permitted by the relevant laws and regulations or by the shareholders.

      A director, supervisor, manager and other senior officer who contravenes any law, regulation or the
company’s articles of association in the performance of his duties which results in any loss to the company
shall be personally liable to the company.

      The Special Regulations and the Mandatory Provisions provide that a director, supervisor, manager and other
senior officer of a company owe fiduciary duties to the company and are required to perform their duties faithfully
and to protect the interests of the company and not to make use of their positions in the company for their own
benefit.

Finance and Accounting

      A company shall establish its financial and accounting systems according to laws, administrative regulations
and the regulations of the responsible financial department of the State Council and at the end of each financial year,
prepare a financial report which shall be audited and verified as provided by law.

      A company shall deposit its financial statements at the company for inspection by the shareholders at least
20 days before the convening of the annual general meeting of shareholders. A company incorporated by public
subscription must publish its financial statements.

      The common reserve of a company comprises the statutory surplus reserve, the discretionary common reserve
and the capital common reserve.

      When distributing each year’s after-tax profits, the company shall set aside 10% of its after-tax profits for the
company’s statutory surplus reserve (except where the reserve has reached 50% of the company’s registered
capital). After a company has made an allocation to its statutory common reserve from its after-tax profit, subject to
a resolution of the shareholders’ general meeting, the company may make an allocation to a discretionary common
reserve.

      When the company’s statutory surplus reserve is not sufficient to make up for the company’s losses of the
previous year, current year profits shall be used to make good the losses before allocations are set aside for the
statutory surplus reserve.

      After the company has made good its losses and make allocations to its statutory surplus reserve the
remaining profits could be available for distribution to shareholder in proportion to the number of shares held by the
shareholders except as otherwise provided in the articles of association of such company limited by shares.

      The capital common reserve of a company is made up of the premium over the nominal value of the shares of
the company on issue and other amounts required by the relevant governmental authority to be treated as the capital
common reserve.

                                                      – VI-11 –
APPENDIX VI                                                        SUMMARY OF PRINCIPAL LEGAL
                                                                    AND REGULATORY PROVISIONS


      The common reserve of a company shall be applied for the following purposes:

      (i)     to make up the company’s losses other than the capital common reserve;

      (ii)    to expand the business operations of the company; and

      (iii)   to increase the registered capital of the company by the issue of new shares to shareholders in
              proportion to their existing shareholdings in the company or by increasing the par value of the shares
              currently held by the shareholders provided that if the statutory surplus reserve is converted into
              registered capital, the balance of the statutory surplus reserve after such conversion shall not be less
              than 25% of the registered capital on the company.

Appointment and Retirement of Auditors

      The Special Regulations require a company to employ an independent PRC qualified accounting firm to audit
the company’s annual report and review and check other financial reports.

     The auditors are to be appointed for a term commencing from the close of an annual general meeting and
ending at the close of the next following annual general meeting.

      If a company removes or ceases to continue to appoint the auditors, it is required by the Special Regulations to
give prior notice to the auditors and the auditors are entitled to make representations before the shareholders in
general meeting. The appointment, removal or non re-appointment of auditors shall be decided by the shareholders
at shareholders’ general meetings and shall be filed with the CSRC for record.

Distribution of Profits

      The PRC Company law provides that a company is restricted from distributing profits before accumulated
losses have been made up and statutory common reserve have been drawn. The Special Regulations provide that the
dividends and other distributions to be paid to holders of overseas listed foreign invested shares shall be declared
and calculated in Renminbi and paid in foreign currency. Under the Mandatory Provisions, the payment of foreign
currency to shareholders shall be made through a receiving agent.

Amendments to Articles of Association

       Any amendments to the company’s articles of association must be made in accordance with the procedures set
forth in the company’s articles of association. Any amendment of provisions incorporated in the articles of
association in connection with the Mandatory Provisions will only be effective after approval by the companies
approval department authorized by the State Council and the CSRC. In relation to matters involving the company’s
registration, its registration with the companies registration authority must also be changed.

Dissolution and Liquidation

      A company may apply for the declaration of insolvency by reason of its inability to pay debts as they fall due.
After the people’s court has made a declaration of the company’s insolvency, the shareholders, the relevant
authorities and the relevant professionals shall form a liquidation committee to conduct the liquidation of the
company.

      Under the PRC Company Law, a company shall be dissolved in any of the following events:

      (i)     the term of its operations set down in its articles of association has expired or events of dissolution
              specified in its articles of association have occurred;

                                                      – VI-12 –
APPENDIX VI                                                        SUMMARY OF PRINCIPAL LEGAL
                                                                    AND REGULATORY PROVISIONS


      (ii)    the shareholders in general meeting have resolved to dissolve the company;

      (iii) the company is dissolved by reason of its merger or demerger;

      (iv)    the company is subject to the revocation of business license, a closure order or dismissal in accordance
              with laws; or

      (v)     in the event that the company encounters substantial difficulties in its operation and management and
              its continuance shall cause a significant loss, in the interest of shareholders, and where this cannot be
              resolved through other means, shareholders who hold more than 10% of the total shareholders’ voting
              rights of the company may present a petition to the people’s court for the dissolution of the company.

      Where the company is dissolved in the circumstances described in (i), (ii), (iv) and (v) above, a liquidation
committee must be formed within 15 days after the occurrence of the cause of dissolution so as to carry out
liquidation. Members of the liquidation committee shall be composed of the directors or any other people as
determined by the shareholders’ meeting.

      If a liquidation committee is not established within the stipulated period, the company’s creditors can apply to
the people’s court for its establishment.

       The liquidation committee shall notify the company’s creditors within ten days after its establishment, and
issue a public notice in the newspapers within 60 days. A creditor shall lodge his claim with the liquidation
committee within 30 days after receiving notification, or within 45 days of the public notice if he did not receive any
notification. The liquidation committee shall exercise the following powers during the liquidation period:

      (i)     to handle the company’s assets and to prepare a balance sheet and an inventory of the assets;

      (ii)    to notify creditors or issue public notices;

      (iii)   to deal with and settle any outstanding business of the company;

      (iv)    to pay any tax overdue;

      (v)     to settle the company’s financial claims and liabilities;

      (vi)    to handle the surplus assets of the company after its debts have been paid off; and

      (vii) to represent the company in civil lawsuits.

      If the company’s assets are sufficient to meet its liabilities, they shall be applied towards the payment of the
liquidation expenses, wages owed to the employees and labor insurance expenses, tax overdue and debts of the
company. Any surplus assets shall be distributed to the shareholders of the company in proportion to the number of
shares held by them.

      During the liquidation period, a company shall not engage in operating activities unrelated to the liquidation.

       If the liquidation committee becomes aware that the company does not have sufficient assets to meet its
liabilities, it must immediately apply to the people’s court for a declaration for bankruptcy. Following such
declaration, the liquidation committee shall hand over all affairs of the liquidation to the people’s court.

      Upon completion of the liquidation, the liquidation committee shall submit a liquidation report to the
shareholders’ general meeting or the relevant supervisory department for verification. Thereafter, the report shall be

                                                      – VI-13 –
APPENDIX VI                                                         SUMMARY OF PRINCIPAL LEGAL
                                                                     AND REGULATORY PROVISIONS


submitted to the companies registration authority in order to cancel the company’s registration, and a public notice
of its termination shall be issued.

      Members of the liquidation committee are required to discharge their duties honestly and in compliance with
relevant laws. A member of liquidation committee is liable to indemnify the company and its creditors in respect of
any loss arising from his willful or material default.

Overseas Listing

      The shares of a company shall only be listed overseas after obtaining approval from the securities regulatory
authority of the State Council and the listing must be arranged in accordance with procedures specified by the State
Council.

      According to the Special Regulations, a company’s plan to issue overseas listed foreign invested shares and
domestic invested shares which has been approved by the Securities Commission may be implemented by the board
of directors of a company by way of separate issues, within 15 months after approval is obtained from the CSRC.

Loss of Share Certificates

      A shareholder may apply, in accordance with the relevant provision set out in the PRC Civil Procedure Law, to
a people’s court in the event that share certificates in registered form are either stolen or lost, for a declaration that
such certificates will no longer be valid. After such a declaration has been obtained, the shareholder may apply to
the company for the issue of replacement certificates.

      The Mandatory Provisions provide for a separate procedure regarding loss of H share certificates (which has
been incorporated in the Articles of Association, a summary of which is set out in “Appendix VII — Summary of
the Articles of Association”).

Suspension and Termination of Listing

     The PRC Company Law has deleted provisions governing suspension and termination of listing. The new
Securities Law has been amended as follows:

     The trading of shares of a company on a stock exchange may be suspended if so decided by the securities
administration department of the State Council (the new Securities Law has renamed this as the Securities
Exchange) under one of the following circumstances:

      (i)    the registered capital or shareholding distribution no longer comply with the necessary requirements
             for a listed company;

      (ii)   the company failed to make public its financial position in accordance with the requirements or there is
             false information in the company’s financial report with the possibility of misleading investors;

      (iii) the company has committed a major breach of the law;

      (iv)   the company has incurred losses for three consecutive years; or

      (v)    other circumstances as required by the listing rules of the relevant stock exchange(s).

       Under the Securities Law, in the event that the conditions for listing are not satisfied within the period
stipulated by the relevant stock exchange in the case described in (i) above, or the company has refused to rectify the
situation in the case described in (ii) above, or the company fails to become profitable in the next subsequent year in

                                                       – VI-14 –
APPENDIX VI                                                         SUMMARY OF PRINCIPAL LEGAL
                                                                     AND REGULATORY PROVISIONS


the case described in (iv) above, the relevant stock exchange shall have the right to terminate the listing of the shares
of the company.

Merger and Demerger

       Companies may merge through merger by absorption or through the establishment of a newly merged entity.
If it merges by absorption, the company which is absorbed shall be dissolved. If it merges by forming a new
corporation, both companies will be dissolved.

SECURITIES LAW AND REGULATIONS

      The PRC has promulgated a number of regulations that relate to the issue and trading of the Shares and
disclosure of information by us. In October 1992, the State Council established the Securities Committee and the
CSRC. The Securities Committee was responsible for co-ordinating the drafting of securities regulations,
formulating securities-related policies, planning the development of securities markets, directing, coordinating
and supervising all securities-related institutions in the PRC and administering the CSRC. The CSRC was the
regulatory body of the Securities Committee and responsible for the drafting of regulatory provisions of securities
markets, supervising securities companies, regulating public offers of securities by PRC companies in the PRC or
overseas, regulating the trading of securities, compiling securities-related statistics and undertaking research and
analysis. In 1998, the State Council dissolved the Securities Committee and assigned its function to the CSRC. The
CSRC is also responsible for the regulation and supervision of the national stocks and futures market according to
laws, regulations and authorizations.

      The Securities Law took effect on July 1, 1999 and was revised for the first time on August 28, 2004 and the
second time on October 27, 2005. This is the first national securities law in the PRC, and it is divided into
12 chapters and 240 articles regulating, among other things, the issue and trading of securities, takeovers by listed
companies, securities exchanges, securities companies and the duties and responsibilities of the State Council’s
securities regulatory authorities. The Securities Law comprehensively regulates activities in the PRC securities
market. Article 238 of the Securities Law provides that a PRC company must obtain prior approval from the State
Council’s regulatory authorities to list its shares outside the PRC. Article 239 of the Securities Law provides that
specific measures in respect of shares of companies in the PRC which are to be subscribed and traded in foreign
currencies shall be separately formulated by the State Council. Currently, the issue and trading of foreign issued
shares (including H Shares) are still mainly governed by the rules and regulations promulgated by the State Council
and the CSRC.

ARBITRATION AND ENFORCEMENT OF ARBITRAL AWARDS

      The Arbitration Law of the PRC (                               ) (the “Arbitration Law”) was passed by the
Standing Committee of the NPC on August 31, 1994 and became effective on September 1, 1995. It is applicable to
contract disputes and other property disputes between natural person, legal person and other organizations where
the parties have entered into a written agreement to refer the matter to arbitration before an arbitration committee
constituted in accordance with the Arbitration Law. Under the Arbitration Law, an arbitration committee may,
before the promulgation by the PRC Arbitration Association of arbitration regulations, formulate interim arbitration
rules in accordance with the Arbitration Law and the PRC Civil Procedure Law. Where the parties have by
agreement provided arbitration as the method for dispute resolution, the people’s court will refuse to handle the
case.

                                                       – VI-15 –
APPENDIX VI                                                          SUMMARY OF PRINCIPAL LEGAL
                                                                      AND REGULATORY PROVISIONS


       The Listing Rules and the Mandatory Provisions require an arbitration clause to be included in the Articles of
Association and, in the case of the Listing Rules, also in contracts with each of the Directors and Supervisors, to the
effect that whenever any disputes or claims arise between holders of the H Shares and us; holders of the H Shares
and the Directors, Supervisors, manager or other senior officers; or holders of the H Shares and holders of domestic
Shares, in respect of any disputes or claims in relation to our affairs or as a result of any rights or obligations arising
under the Articles of Association, the PRC Company Law or other relevant laws and administrative regulations,
such disputes or claims shall be referred to arbitration.

       Where a dispute or claim of rights referred to in the preceding paragraph is referred to arbitration, the entire
claim or dispute must be referred to arbitration, and all persons who have a cause of action based on the same facts
giving rise to the dispute or claim or whose participation is necessary for the resolution of such dispute or claim,
shall comply with the arbitration. Disputes in respect of the definition of shareholders and disputes in relation to our
register of shareholders need not be resolved by arbitration.

       A claimant may elect for arbitration to be carried out at either the China International Economic and Trade
Arbitration Commission (“CIETAC”) in accordance with its rules or the Hong Kong International Arbitration
Center (“HKIAC”) in accordance with its securities arbitration rules. Once a claimant refers a dispute or claim to
arbitration, the other party must submit to the arbitral body elected by the claimant. If the claimant elects for
arbitration to be carried out at the HKIAC, any party to the dispute or claim may apply for a hearing to take place in
Shenzhen in accordance with the securities arbitration rules of the HKIAC.

      Under the Arbitration Law and the PRC Civil Procedure Law, an arbitral award is final and binding on the
parties. If a party fails to comply with an award, the other party to the award may apply to the people’s court for
enforcement. A people’s court may refuse to enforce an arbitral award made by an arbitration commission if there is
any procedural or membership irregularity specified by law or the award exceeds the scope of the arbitration
agreement or is outside the jurisdiction of the arbitration commission.

       A party seeking to enforce an arbitral award of PRC arbitration panel against a party who, or whose property,
is not within the PRC, may apply to a foreign court with jurisdiction over the case for enforcement. Similarly, an
arbitral award made by a foreign arbitration body may be recognized and enforced by the PRC courts in accordance
with the principles of reciprocity or any international treaty concluded or acceded to by the PRC. The PRC acceded
to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards
(                                      ) (the “New York Convention”) adopted on June 10, 1958 pursuant to a
resolution of the Standing Committee of the NPC passed on December 2, 1986. The New York Convention provides
that all arbitral awards made in a state which is a party to the New York Convention shall be recognized and enforced
by other parties to the New York Convention, subject to their right to refuse enforcement under certain
circumstances, including where the enforcement of the arbitral award is against the public policy of the State
to which the application for enforcement is made. It was declared by the Standing Committee of the NPC
simultaneously with the accession of the PRC that (i) the PRC will only recognize and enforce foreign arbitral
awards on the principle of reciprocity and (ii) the PRC will only apply the New York Convention in disputes
considered under PRC laws to arise from contractual and non-contractual mercantile legal relations.

      In June 1999, an arrangement was made between Hong Kong and the Supreme People’s Court for the mutual
enforcement of arbitral awards. This new arrangement was approved by the Supreme People’s Court and the
Hong Kong Legislative Council, and became effective on February 1, 2000. The arrangement is made in accordance
with the spirit of the New York Convention. Under the arrangement, awards made by PRC arbitral authorities

                                                        – VI-16 –
APPENDIX VI                                                        SUMMARY OF PRINCIPAL LEGAL
                                                                    AND REGULATORY PROVISIONS


pursuant to the Arbitration Law can be enforced in Hong Kong. Hong Kong arbitration awards made under the
Arbitration Ordinance of Hong Kong are also enforceable in the PRC.

ESTABLISHMENT OF OVERSEAS OPERATIONS RULES AND REGULATIONS

       According    to   the Foreign Exchange Control Regulations for Overseas Investments
(                           ), which was formulated by SAFE and approved by the State Council, upon
obtaining approval from the MOFCOM to establish enterprises overseas, PRC enterprises shall apply for
foreign exchange registration for overseas investments.

       According to the Verification and Approval of Overseas Investment Projects Tentative Administrative
(                                        ), promulgated by the NDRC, investment projects involving the use of a
large amount of foreign exchange would require the verification and approval by the NDRC or the State Council. If
there is any change with respect to the investor or equity holding of a project that has been verified and approved, an
application for amendment shall be made to the NDRC.

HONG KONG LAWS AND REGULATIONS

Company Law

     The Hong Kong law applicable to a company having share capital incorporated in Hong Kong is based on the
Companies Ordinance and is supplemented by common law. Our Company, which is a joint stock limited liability
company established in the PRC, is governed by the PRC Company Law and all other rules and regulations
promulgated pursuant to the PRC Company Law applicable to a joint stock limited liability company established in
the PRC issuing overseas listed foreign shares to be listed on the Hong Kong Stock Exchange.

     Set out below is a summary of the material differences between the Companies Ordinance applicable to a
company incorporated in Hong Kong and the PRC Company Law applicable to a joint stock limited liability
company incorporated and existing under the PRC Company Law. This summary is, however, not intended to be an
exhaustive comparison:

(i)    Corporate existence

     Under Companies Ordinance, a company having share capital is incorporated by the Registrar of Companies
in Hong Kong issuing a certificate of incorporation and upon its incorporation, a company will acquire an
independent corporate existence. A company may be incorporated as a public company or a private company.

      Under the PRC Company Law, a joint stock limited liability company may be incorporated by either the
promotion method or the subscription method. A joint stock limited liability company must have a minimum
registered capital of RMB5 million, or higher as may otherwise be required by the laws and regulations. Hong Kong
law does not prescribe any minimum capital requirements for a Hong Kong company. Under the PRC Company
Law, the monetary contributions by all the shareholders must not be less than 30% of the registered capital. There is
no such restriction on a Hong Kong company under Hong Kong law.

(ii)   Share capital

      Under Hong Kong law, the authorized share capital of a Hong Kong company is the amount of share capital
which the company is authorized to issue and a company is not bound to issue the entire amount of its authorized
share capital. For a Hong Kong company, the authorized share capital may be larger than the issued share capital.
Hence, the directors of a Hong Kong company may, with the prior approval of the shareholders, if required, cause

                                                      – VI-17 –
APPENDIX VI                                                        SUMMARY OF PRINCIPAL LEGAL
                                                                    AND REGULATORY PROVISIONS


the company to issue new shares. The PRC Company Law does not recognize the concept of authorized share
capital. The registered capital of a joint stock limited liability company is the amount of the issued share capital.
Any increase in registered capital must be approved by the shareholders in general meeting and by the relevant
governmental and regulatory authorities in the PRC.

      Under the PRC Company Law, a company which is authorized by the relevant securities administration
authority to list its shares on a stock exchange must have a registered capital of not less than RMB30 million.
Hong Kong law does not prescribe any minimum capital requirements for companies incorporated in Hong Kong.

      Under the PRC Company Law, the shares may be subscribed for in the form of money or non-monetary assets
(other than assets not entitled to be used as capital contributions under relevant laws and administrative regulations).
For non-monetary assets to be used as capital contributions, appraisals and verification must be carried out to ensure
no overvaluation or under-valuation of the assets. The monetary contribution shall not be less than 30% of a joint
stock limited liability company’s registered capital. There is no such restriction on a Hong Kong company under
Hong Kong law.

(iii)   Restrictions on shareholding and transfer of shares

      Under PRC law, the domestic shares in the share capital of a joint stock limited liability company which are
denominated and subscribed for in Renminbi may only be subscribed or traded by the State, PRC legal and natural
persons. The overseas listed foreign shares issued by a joint stock limited liability company which are denominated
in Renminbi and subscribed for in a currency other than Renminbi may only be subscribed and traded by investors
from Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan or any country and territory
outside the PRC.

      Under the PRC Company Law, shares in a joint stock limited liability company held by its promoters cannot
be transferred within one year after the date of establishment of the company. Shares in issue prior to the company’s
public offering cannot be transferred within one year from the listing date of the shares on the Hong Kong Stock
Exchange. Shares in a joint stock limited liability company held by its directors, supervisors and managers and
transferred each year during their term of office shall not exceed 25% of the total shares they held in the company,
and the shares they held in the company cannot be transferred within one year from the listing date of the shares, and
also cannot be transferred within half a year after the said personnel has left office. The articles of association may
set other restrictive requirements on the transfer of the company’s shares held by its directors, supervisors and
officers. There are no such restrictions on shareholdings and transfers of shares under Hong Kong law apart from the
six-month lock up on our Company’s issue of shares and the 12-month lock up on controlling shareholders’ disposal
of shares, as illustrated by the undertakings given by our Company to the Hong Kong Stock Exchange as described
in the section entitled “Underwriting” in this prospectus.

(iv)    Financial assistance for acquisition of shares

      The PRC Company Law does not contain any provision prohibiting or restricting a joint stock limited liability
company or its subsidiaries from providing financial assistance for the purpose of an acquisition of its own or its
holding company’s shares. The Mandatory Provisions contain certain restrictions on a company and its subsidiaries
providing such financial assistance similar to those under Companies Ordinance.

(v)     Variation of class rights

    The PRC Company Law makes no specific provision relating to variation of class rights. However, the PRC
Company Law states that the State Council can promulgate regulations relating to other kinds of shares. The

                                                      – VI-18 –
APPENDIX VI                                                         SUMMARY OF PRINCIPAL LEGAL
                                                                     AND REGULATORY PROVISIONS


Mandatory Provisions contain elaborate provisions relating to the circumstances which are deemed to be variation
of class rights and the approval procedures required to be followed in respect thereof. These provisions have been
incorporated in the Articles of Association, which are summarized in the appendix entitled “Appendix VII —
Summary of the Articles of Association” to this prospectus. Under Companies Ordinance, no rights attached to any
class of shares can be varied except (i) with the approval of a special resolution of the holders of the relevant class at
a separate meeting, (ii) with the consent in writing of the holders of three-fourths in nominal value of the issued
shares of the class in question, (iii) by agreement of all the members of the company or (iv) if there are provisions in
the articles of association relating to the variation of those rights, then in accordance with those provisions.

      Our Company (as required by the Listing Rules and the Mandatory Provisions) have adopted in the Articles of
Association provisions protecting class rights in a similar manner to those found in Hong Kong law. Holders of
overseas listed shares and domestic listed shares are defined in the Articles of Association as different classes,
except in the case of (i) where our Company issues, upon the approval by special resolution of the Shareholders in
general meeting, either separately or concurrently once every 12 months, not more than 20% of each of our existing
issued domestic Shares or overseas-listed foreign-invested Shares; (ii) where our Company completes, with
15 months from the date on which approval is given by the securities regulatory authorities of the State Council, our
plan (made at the time of our establishment) to issue domestic Shares and overseas-listed foreign-invested Shares;
and (iii) where the Shares registered on our domestic Share register may be transferred to overseas investors, and
such transferred Shares may be listed or traded on an overseas stock exchange, subject to the approval of the
securities regulatory authorities of the State Council.

(vi)   Directors

      The PRC Company Law, unlike Companies Ordinance, does not contain any requirements relating to the
declaration of interests in material contracts, restrictions on interested directors being counted towards the quorum
of and voting at a meeting of the board of directors at which a transaction in which a director is interested is being
considered, restrictions on directors’ authority in making major dispositions, restrictions on companies providing
certain benefits such as loans to directors and guarantees in respect of directors’ liability and prohibition against
compensation for loss of office without shareholders’ approval. The Mandatory Provisions, however, contain
requirements and restrictions in relation to the foregoing matters similar to those applicable under Hong Kong law.

(vii) Supervisory committee

      Under the PRC Company Law, the board of directors and managers of a joint stock limited liability company
is subject to the supervision and inspection of a supervisory committee but there is no mandatory requirement for
the establishment of a supervisory committee for a company incorporated in Hong Kong. The Mandatory
Provisions provide that each supervisor owes a duty, in the exercise of his powers, to act in good faith and
honestly in what he considers to be in the best interests of the company and to exercise the care, diligence and skill
that a reasonably prudent person would exercise under comparable circumstances.

(viii) Derivative action by non-controlling shareholders

       Hong Kong law permits non-controlling shareholders to start a derivative action on behalf of a company
against directors who have been guilty of a breach of their fiduciary duties to the company, if such directors control a
majority of votes at a general meeting thereby effectively preventing a company from suing the directors in breach
of their duties in its own name. The PRC Company Law gives shareholders of a joint stock limited liability company
the right that in the event that the directors and senior managers violate their fiduciary obligations to a company,

                                                       – VI-19 –
APPENDIX VI                                                         SUMMARY OF PRINCIPAL LEGAL
                                                                     AND REGULATORY PROVISIONS


shareholders individually or jointly holding over 1% of the shares in the company for more than 180 days
consecutively may request in writing the supervisory committee to initiate proceedings in the people’s court. In the
event that the supervisory committee violates their fiduciary obligations to a company, the above said shareholders
may request in writing the board of directors to initiate proceedings in the people’s court. Upon receipt of such
request in writing from the shareholders, if the supervisory committee or the board of directors refuse to initiate
such proceedings, or has not initiated proceedings within 30 days upon receipt of the request, or if under urgent
situations, failure of initiating immediate proceeding may cause irremediable damages to the company, the above
said shareholders shall for the benefit of the company’s interests, have the right to initiate proceedings directly to the
court in its own name.

       The Mandatory Provisions further provide remedies to the company against directors, supervisors and
officers in breach of their duties to the company. In addition, every director and supervisor of a joint stock limited
liability company applying for a listing of its foreign shares on the Hong Kong Stock Exchange is required to give an
undertaking in favor of the company to comply with the company’s articles of association. This allows non-
controlling shareholders to act against directors and supervisors in default.

(ix)   Protection of minorities

      Under Hong Kong law, a shareholder who complains that the affairs of a company incorporated in Hong Kong
are conducted in a manner unfairly prejudicial to his interests may petition to court to either wind up the company or
make an appropriate order regulating the affairs of the company. In addition, on the application of a specified
number of members, the Financial Secretary may appoint inspectors who are given extensive statutory powers to
investigate the affairs of a company incorporated in Hong Kong. The PRC Company Law does not contain similar
safeguards. The Mandatory Provisions, however, contain provisions to the effect that a controlling shareholder may
not exercise its voting rights in a manner prejudicial to the interests of the shareholders generally or of some part of
the shareholders of a company to relieve a director or supervisor of his duty to act honestly in the best interests of the
company or to approve the expropriation by a director or supervisor of the company’s assets or the individual rights
of other shareholders.

(x)    Notice of shareholders’ meetings

       Under the PRC Company Law, notice of a shareholders’ general meeting must be given 20 days before the
meeting, while notice of an extraordinary meeting must be given 15 days before the meeting or, in the case of a
company having bearer shares, a public announcement of a shareholders’ general meeting must be made 30 days
prior to it being held. Under the Special Regulations and the Mandatory Provisions, 45 days’ written notice must be
given to all shareholders and shareholders who wish to attend the meeting must reply in writing 20 days before the
date of the meeting. For a company incorporated in Hong Kong, the minimum notice periods of a general meeting
convened for passing an ordinary resolution and a special resolution are 14 days and 21 days, respectively; and the
notice period for an annual general meeting is 21 days.

(xi)   Quorum for shareholders’ meetings

       Under Hong Kong law, the quorum for a general meeting is two members unless the articles of association of
the company otherwise provide. For one member companies, one member will be a quorum. The PRC Company
Law does not specify any quorum requirement for shareholders’ general meeting but the Special Regulations and
the Mandatory Provisions provide that a company’s general meeting can be convened when replies to the notice of
that meeting have been received from shareholders whose shares represent 50% of the voting rights in the company
at least 20 days before the proposed date of the meeting. If that 50% level is not achieved, the company shall within

                                                       – VI-20 –
APPENDIX VI                                                       SUMMARY OF PRINCIPAL LEGAL
                                                                   AND REGULATORY PROVISIONS


five days notify shareholders by public announcement and the shareholders’ general meeting may be held
thereafter.

(xii) Voting

      Under Hong Kong law, an ordinary resolution is passed by a simple majority of votes cast by members present
in person or by proxy at a general meeting and a special resolution is passed by a majority of not less than three-
fourths of votes cast by members present in person or by proxy at a general meeting. Under the PRC Company Law,
the passing of any resolution requires more than one half of the votes cast by shareholders present in person or by
proxy at a shareholders’ general meeting except in cases of proposed amendment to the articles of association,
increase or reduction of share capital, and merger, demerger or dissolution of a joint stock limited liability company
or changes to the company status, which require two-thirds or more of votes cast by shareholders present at a
shareholders’ general meeting.

(xiii) Financial disclosure

      A joint stock limited liability company is required under the PRC Company Law to make available at its office
for inspection by shareholders its annual balance sheet, profit and loss account, changes in financial position and
other relevant annexures 20 days before an annual general meeting. In addition, a company established by the public
subscription method under the PRC Company Law must publish its financial situation. The annual balance sheet
has to be verified by registered accountants. The Companies Ordinance requires a company to send to every
shareholder a copy of its balance sheet, auditors’ report and directors’ report which are to be tabled before the
company in its annual general meeting not less than 21 days before such meeting.

      A joint stock limited liability company is required under the PRC law to prepare its financial statements in
accordance with the PRC accounting standards. The Mandatory Provisions require that the company must, in
addition to preparing accounts according to the PRC GAAP, have its accounts prepared and audited in accordance
with IFRS or Hong Kong accounting standards and its financial statements must also contain a statement of the
financial effect of the material differences (if any) from the financial statements prepared in accordance with the
PRC GAAP.

      The Special Regulations require that there should not be any inconsistency between the information disclosed
within and outside the PRC and that, to the extent that there are differences in the information disclosed in
accordance with the relevant PRC and overseas laws, regulations and requirements of the relevant stock exchanges,
such differences should also be disclosed simultaneously.

(xiv) Information on directors and shareholders

      The PRC Company Law gives shareholders the right to inspect the articles of association, minutes of the
shareholders’ general meetings and financial and accounting reports. Under the Articles of Association,
shareholders have the right to inspect and copy (at reasonable charges) certain information on shareholders
and on directors similar to that available to shareholders of Hong Kong companies under Hong Kong law.

(xv) Receiving agent

      Under both the PRC and Hong Kong law, dividends once declared become debts payable to shareholders. The
limitation period for debt recovery action under Hong Kong law is six years while that under the PRC law is two
years. The Mandatory Provisions require the appointment of a trust company registered under the Hong Kong
Trustee Ordinance (Chapter 29 of the Laws of Hong Kong) as a receiving agent to receive on behalf of holders of

                                                     – VI-21 –
APPENDIX VI                                                         SUMMARY OF PRINCIPAL LEGAL
                                                                     AND REGULATORY PROVISIONS


foreign shares dividends declared and all other monies owed by a joint stock limited liability company in respect of
such foreign shares.

(xvi) Corporate reorganization

      Corporate reorganization involving a company incorporated in Hong Kong may be effected in a number of
ways, such as a transfer of the whole or part of the business or property of the company in the course of being wound
up voluntarily to another company pursuant to section 237 of the Companies Ordinance or a compromise or
arrangement between the company and its creditors or between the company and its members pursuant to
section 166 of the Companies Ordinance which requires the sanction of the court. Under PRC law, the merger,
demerger, dissolution or change to the status of a joint stock limited liability company has to be approved by
shareholders in general meeting.

(xvii) Arbitration of disputes

       In Hong Kong, disputes between shareholders and a company incorporated in Hong Kong or its directors may
be resolved through the courts. The Mandatory Provisions provide that such disputes should be submitted to
arbitration at either the HKIAC or the CIETAC, at the claimant’s choice.

(xviii)Mandatory transfers

      Under the PRC Company Law, a joint stock limited liability company is required to make transfers equivalent
to certain prescribed percentages of its after tax profit to the statutory common reserve fund. There are no such
requirements under Hong Kong law.

(xix) Remedies of a company

      Under the PRC Company Law, if a director, supervisor or manager in carrying out his duties infringes any law,
administrative regulation or the articles of association of a company, which results in damage to the company, that
director, supervisor or manager should be responsible to the company for such damages. In addition, in compliance
with the Mandatory Provisions, the Articles of Association set out remedies to our Company similar to those
available under Hong Kong law (including recovery of profits made by a director, supervisor or officer).

(xx) Dividends

      The articles of association of a company empower the company to withhold, and pay to the relevant tax
authorities, any tax payable under PRC law on any dividends or other distributions payable to a shareholder. Under
Hong Kong law, the limitation period for an action to recover a debt (including the recovery of dividends) is
six years, whereas under PRC laws, the relevant limitation period is two years. A company shall not exercise its
powers to forfeit any unclaimed dividend in respect of its listed foreign shares until after the expiry of the applicable
limitation period.

(xxi) Fiduciary duties

     In Hong Kong, there is the common law concept of the fiduciary duty of directors. Under the PRC Company
Law and the Special Regulations, directors, supervisors, officers, and managers owe a fiduciary duty towards a
company and are not permitted to engage in any activities which compete with or damage the interests of the
company.

                                                       – VI-22 –
APPENDIX VI                                                        SUMMARY OF PRINCIPAL LEGAL
                                                                    AND REGULATORY PROVISIONS


(xxii) Closure of register of shareholders

      The Companies Ordinance requires that the register of shareholders of a company must not generally be
closed for the registration of transfers of shares for more than 30 days (extendable to 60 days in certain
circumstances) in a year, whereas the articles of association of a company provide, as required by the PRC
Company Law and the Mandatory Provisions, that share transfers may not be registered within 30 days before the
date of a shareholders’ meeting or within five days before the record date set for the purpose of distribution of
dividends.

Listing Rules

       The Listing Rules provide additional requirements which apply to an issuer which is incorporated in the PRC as
a joint stock limited liability company and seeks a primary listing or whose primary listing is on the Hong Kong Stock
Exchange. Set out below is a summary of such principal additional requirements which apply to our Company:

(i)     Compliance Advisor

        A company seeking listing on the Hong Kong Stock Exchange is required to appoint a compliance advisor
acceptable to the Hong Kong Stock Exchange for the period from its listing date up to the date of the publication of
its first full year’s financial results, to provide the company with professional advice on continuous compliance with
the Listing Rules and all other applicable laws, regulations, rules, codes and guidelines, and to act at all times, in
addition to the company’s two authorized representatives, as the principal channel of communication with the
Hong Kong Stock Exchange. The appointment of the compliance advisor may not be terminated until a replacement
acceptable to the Hong Kong Stock Exchange has been appointed.

      If the Hong Kong Stock Exchange is not satisfied that the compliance advisor is fulfilling its responsibilities
adequately, it may require the company to terminate the compliance advisor’s appointment and appoint a
replacement.

      The compliance advisor must keep the company informed on a timely basis of changes in the Listing Rules
and any new or amended law, regulation or code in Hong Kong applicable to the company. It must act as the
company’s principal channel of communication with the Hong Kong Stock Exchange if the authorized
representatives of the company are expected to be frequently outside Hong Kong.

(ii)    Accountants’ report

     An accountants’ report for a PRC issuer will not normally be regarded as acceptable by the Hong Kong Stock
Exchange unless the relevant accounts have been audited to a standard comparable to that required in Hong Kong.
Such report will normally be required to conform to either Hong Kong or international accounting standards.

(iii)   Process agent

       Our Company is required to appoint and maintain a person authorized to accept service of process and notices
on its behalf in Hong Kong throughout the period during which its securities are listed on the Hong Kong Stock
Exchange and must notify the Hong Kong Stock Exchange of his appointment, the termination of his appointment
and his contact particulars.

(iv)    Public shareholdings

      If at any time there are existing issued securities of a PRC issuer other than foreign shares which are listed on
the Hong Kong Stock Exchange, the Listing Rules require that the aggregate amount of H shares and other securities

                                                      – VI-23 –
APPENDIX VI                                                       SUMMARY OF PRINCIPAL LEGAL
                                                                   AND REGULATORY PROVISIONS


held by the public must constitute not less than 25% of the PRC issuer’s issued share capital and that the class of
securities for which listing is sought must not be less than 15% of the issuer’s total issued share capital, having an
expected market capitalization at the time of listing of not less than HK$50 million.

      The Hong Kong Stock Exchange may, at its discretion, accept a lower percentage of between 15% and 25% in
the case of issuers with an expected market capitalization at the time of listing of over HK$10,000 million.

(v)    Independent non-executive directors and supervisors

      The independent non-executive directors of a PRC issuer are required to demonstrate an acceptable standard
of competence and adequate commercial or professional expertise to ensure that the interests of the general body of
shareholders will be adequately represented. The supervisors of a PRC issuer must have the character, expertise and
integrity and be able to demonstrate a standard of competence commensurate with their position as supervisors.

(vi)   Restrictions on purchase and subscription of its own securities

      Subject to governmental approvals and the provisions of the Articles of Association, our Company may
repurchase our own H shares on the Hong Kong Stock Exchange in accordance with the provisions of the Listing
Rules. Approval by way of special resolution of the holders of domestic Shares and the holders of H Shares at
separate class meetings conducted in accordance with the Articles of Association is required for share repurchases.
In seeking approvals, our Company is required to provide information on any proposed or actual purchases of all or
any of our equity securities, whether or not listed or traded on the Hong Kong Stock Exchange. The Directors must
also state the consequences of any purchases which will arise under either or both of the Code on Takeovers and
Mergers and any similar PRC law of which they are aware, if any. Any general mandate given to the Directors to
repurchase H Shares must not exceed 10% of the total amount of existing issued H Shares.

(vii) Mandatory Provisions

       With a view to increasing the level of protection afforded to investors, the Hong Kong Stock Exchange
requires the incorporation, in the articles of association of a PRC company whose primary listing is on the
Hong Kong Stock Exchange, of the Mandatory Provisions and provisions relating to the change, removal and
resignation of auditors, class meetings and the conduct of the supervisory committee of the company. Such
provisions have been incorporated into the Articles of Association, a summary of which is set out in the appendix
entitled “Appendix VII — Summary of the Articles of Association” to this prospectus.

(viii) Redeemable Shares

      Our Company must not issue any redeemable Shares unless the Hong Kong Stock Exchange is satisfied that
the relative rights of the holders of the H Shares are adequately protected.

(ix)   Pre-emptive rights

      Except in the circumstances mentioned below, the Directors are required to obtain the approval by a special
resolution of Shareholders in general meeting, and the approvals by special resolutions of the holders of domestic
Shares and H Shares (each being otherwise entitled to vote at general meetings) at separate class meetings
conducted in accordance with the Articles of Association, prior to authorizing, allotting, issuing or granting shares
or securities convertible into shares, or options, warrants or similar rights to subscribe for any shares or such
convertible securities.

     No such approval will be required under the Listing Rules, but only to the extent that, the existing
Shareholders of our Company have by special resolution in general meeting given a mandate to the Directors,

                                                     – VI-24 –
APPENDIX VI                                                         SUMMARY OF PRINCIPAL LEGAL
                                                                     AND REGULATORY PROVISIONS


either unconditionally or subject to such terms and conditions as may be specified in the resolution, to authorize,
allot or issue, either separately or concurrently once every 12 months, not more than 20% of the existing domestic
Shares and H Shares as at the date of the passing of the relevant special resolution or of such Shares that are part of
our plan at the time of our establishment to issue domestic Shares and H Shares and which plan is implemented
within 15 months from the date of approval by the CSRC.

(x)    Supervisors

      Our Company is required to adopt rules governing dealings by the Supervisors in securities of our Company
in terms no less exacting than those of the model code (set out in Appendix 10 to the Listing Rules) issued by the
Hong Kong Stock Exchange.

      Our Company is required to obtain the approval of the Shareholders in a general meeting (at which the
relevant Supervisor and his associates shall not vote on the matter) prior to our Company or any of our subsidiaries
entering into a service contract of the following nature with a Supervisor or proposed Supervisor of our Company or
our subsidiaries: (i) the contract is for a duration that may exceed three years; or (ii) the contract expressly requires
our Company to give more than one year’s notice or to pay compensation or make other payments equivalent to
more than one year’s emoluments.

      The remuneration and appraisal committee of our Company or an independent board committee must form a
view in respect of service contracts that require Shareholders’ approval and advise Shareholders (other than
shareholders with a material interest in the service contracts and their associates) as to whether the terms are fair and
reasonable, advise whether such contracts are in the interests of our Company and the Shareholders as a whole and
advise Shareholders on how to vote.

(xi)   Amendment to the Articles of Association

      Our Company is required not to permit or cause any amendment to be made to the Articles of Association
which would cause the same to cease to comply with the mandatory provisions of the Listing Rules relating to such
Articles of Association.

(xii) Documents for inspection

      Our Company is required to make available at a place in Hong Kong for inspection by the public and
shareholders free of charge, and for copying by Shareholders at reasonable charges of the following:

       —    a complete duplicate register of Shareholders;

       —    a report showing the state of the issued share capital of our Company;

       —    our Company’s latest audited financial statements and the reports of the Directors, auditors and
            Supervisors (if any) thereon;

       —    special resolutions of our Company;

       —    reports showing the number and nominal value of securities repurchased by our Company since the end
            of the last financial year, the aggregate amount paid for such securities and the maximum and minimum
            prices paid in respect of each class of securities repurchased (with a breakdown between A Shares and
            H Shares);

                                                       – VI-25 –
APPENDIX VI                                                        SUMMARY OF PRINCIPAL LEGAL
                                                                    AND REGULATORY PROVISIONS


      —     a copy of the latest annual return filed with SAIC; and

      —     for Shareholders only, copies of minutes of meetings of Shareholders.

(xiii) Receiving agents

      Our Company is required to appoint one or more receiving agents in Hong Kong and pay to such agent(s)
dividends declared and other monies owing in respect of the H Shares to be held, pending payment, in trust for the
holders of such H Shares.

(xiv) Statements in share certificates

      Our Company is required to ensure that all of our listing documents and share certificates include the
statements stipulated below and to instruct and cause each of our Share registrars not to register the subscription,
purchase or transfer of any of our Shares in the name of any particular holder unless and until such holder delivers to
such Share registrar a signed form in respect of such Shares bearing statements to the following effect that the
acquirer of the Shares:

      —     agrees with our Company and each Shareholder of our Company, and our Company agrees with each
            Shareholder of our Company, to observe and comply with the PRC Company Law, the Special
            Regulations, the Articles of Association and other relevant laws and administrative regulations;

      —     agrees with our Company, each Shareholder, Director, Supervisor, manager and officer of our
            Company, and our Company acting for itself and for each Director, Supervisor, manager and
            officer of our Company agrees with each Shareholder, to refer all differences and claims arising
            from the Articles of Association or any rights or obligations conferred or imposed by the PRC
            Company Law or other relevant laws and administrative regulations concerning the affairs of our
            Company to arbitration in accordance with the Articles of Association, and any reference to arbitration
            shall be deemed to authorize the arbitration tribunal to conduct hearings in open session and to publish
            its award. Such arbitration shall be final and conclusive;

      —     agrees with our Company and each Shareholder of our Company that the H Shares are freely
            transferable by the holder thereof; and

      —     authorizes our Company to enter into a contract on his behalf with each Director and officer of our
            Company whereby each such Director and officer undertakes to observe and comply with his obligation
            to Shareholders as stipulated in the Articles of Association.

(xv) Compliance with the PRC Company Law, the Special Regulations and the Articles of Association

     Our Company is required to observe and comply with the PRC Company Law, the Special Regulations and
the Articles of Association.

(xvi) Contract between our Company and its Directors, officers and Supervisors

      Our Company is required to enter into a contract in writing with every Director and officer containing at least
the following provisions:

      —     an undertaking by the Director or officer to our Company to observe and comply with the PRC
            Company law, the Special Regulations, the Articles of Association, the Codes on Takeovers and

                                                      – VI-26 –
APPENDIX VI                                                       SUMMARY OF PRINCIPAL LEGAL
                                                                   AND REGULATORY PROVISIONS


            Mergers and Share Repurchases and an agreement that our Company shall have the remedies provided
            in the Articles of Association and that neither the contract nor his office is capable of assignment:

      —     an undertaking by the Director or officer to our Company acting as agent for each Shareholder to
            observe and comply with his obligations to Shareholders as stipulated in the Articles of Association;

      —     an arbitration clause which provides that whenever any differences or claims arise from that contract,
            the Articles of Association or any rights or obligations conferred or imposed by the PRC Company Law
            or other relevant law and administrative regulations concerning the affairs of our Company between our
            Company and the Directors or officers and between a holder of H Shares and a Director or officer of our
            Company, such differences or claims will be referred to arbitration at either the CIETAC in accordance
            with its rules or the HKIAC in accordance with its securities arbitration rules, at the election of the
            claimant and that once a claimant refers a dispute or claim to arbitration, the other party must submit to
            the arbitral body elected by the claimant. Such arbitration will be final and conclusive;

      —     if the party seeking arbitration elects to arbitrate the dispute or claim at HKIAC, then either party may
            apply to have such arbitration conducted in Shenzhen according to the securities arbitration rules of
            HKIAC;

      —     PRC laws shall govern the arbitration of disputes or claims referred to above, unless otherwise provided
            by law or administrative regulations;

      —     the award of the arbitral body is final and shall be binding on the parties thereto;

      —     the agreement to arbitrate is made by the Director or officer with our Company on our own behalf and
            on behalf of each Shareholder; and

      —     any reference to arbitration shall be deemed to authorize the arbitral tribunal to conduct hearings in
            open session and to publish its award.

      Our Company is also required to enter into a contract in writing with every Supervisor containing statements
in substantially the same terms.

(xvii) Subsequent listing

      Our Company must not apply for the listing of any of the H Shares on a PRC stock exchange unless the
Hong Kong Stock Exchange is satisfied that the relative rights of the holders of foreign Shares are adequately
protected.

(xviii)English translation

       All notices or other documents required under the Listing Rules to be sent by our Company to the Hong Kong
Stock Exchange or to holders of the H Shares are required to be in the English language, or accompanied by a
certified English translation.

(xix) General

      If any change in the PRC law or market practices materially alters the validity or accuracy of any of the basis
upon which the additional requirements have been prepared, then the Hong Kong Stock Exchange may impose
additional requirements or make listing of the equity securities of a PRC issuer, including our Company, subject to
special conditions as the Hong Kong Stock Exchange considers appropriate. Whether or not any such changes in the

                                                     – VI-27 –
APPENDIX VI                                                         SUMMARY OF PRINCIPAL LEGAL
                                                                     AND REGULATORY PROVISIONS


PRC law or market practices occur, the Hong Kong Stock Exchange retains its general power under the Listing
Rules to impose additional requirements and make special conditions in respect of the Listing.

(c)   Other Legal and Regulatory Provisions

      Upon Listing, the provisions of the SFO, the Codes on Takeovers and Mergers and Share Repurchases and
such other relevant ordinances and regulations as may be applicable to companies listed on the Hong Kong Stock
Exchange will apply to our Company.
(d)   Securities arbitration rules

       The Articles of Association provide that certain claims arising from the Articles of Association or the PRC
Company Law shall be arbitrated at either the CIETAC or the HKIAC in accordance with their respective rules. The
securities arbitration rules of the HKIAC contain provisions allowing an arbitral tribunal to conduct a hearing in
Shenzhen for cases involving the affairs of companies incorporated in the PRC and listed on the Hong Kong Stock
Exchange so that PRC parties and witnesses may attend. Where any party applies for a hearing to take place in
Shenzhen, the tribunal shall, where satisfied that such application is based on bona fide grounds, order the hearing to
take place in Shenzhen conditional upon all parties including witnesses and the arbitrators being permitted to enter
Shenzhen for the purpose of the hearing. Where a party (other than a PRC party) or any of its witnesses or any
arbitrator is not permitted to enter Shenzhen, then the tribunal shall order that the hearing be conducted in any
practicable manner, including the use of electronic media. For the purpose of the securities arbitration rules, a PRC
party means a party domiciled in the PRC.

PRC LEGAL MATTERS
      Our PRC legal advisor, Xinjiang Tianyang Law Firm, has sent to us a legal opinion dated September 27, 2010
which includes a statement to the effect that the description of PRC laws and regulations as contained in this
prospectus is true and correct in all material respects. This legal opinion is available for inspection as referred to in
the section entitled “Documents Available for Inspection” in Appendix IX to this prospectus.

      Any person wishing to have detailed advice on PRC law and the laws of any jurisdiction is recommended to
seek independent legal advice.




                                                       – VI-28 –

								
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